Real Estate Home Question

[Jfire]

I need some solid advice from some brothers. If your in the real estate game even better. The skinny on a long story. We have a 4 yr old stick home. (A new const. home built in a subdivision where many look a like except for minor uprades interior and Ext and the option of 10 different models). I have dumped around 53,000 IN CASH in my home and exterior in 4 yrs. Including A finished man cave most have seen with a crazy 16 ft long bar. A patio anyone would be proud to own. Fin Garage. Etc Etc blah blah blah.
We absolutely hate our neighborhood right now. We have some really good neighbors and alot more people that should of never even been allowed to rent, let alone be able to buy.( a ton of subprime mess and even houses that are selling for 70 cents on the dollar after 2 yrs because people went in like rats and chewed the place up.)
We want to move to a neighborhood that many police and fire officials live(ton of brothers I live w and work with) but till now couldnt afford. The prices in that area have dropped as well. Obviously if i can take a loss for a gain its a no brainer. Prob is they are far and few between cause no one ever wants to move(cant blame em) Let me remind everyone I have a residency clause were I work. I Have to live where I work.
Now the Questions:
Is it even possible to sell anything right now that isn't a foreclosure or short sale or a million dollar + property next to the ocean?
(I cant move with out some money back. I owe 220k on a home I paid 260K for in 06 with 52K in cash upgrades. So I have around 310k into it(maybe more cause I did half the work)
I figure if we list it for 270K im taking a hell of a loss but can make it up on the new property.)
I know I need a Realtor but Im pissed that Im going to take such a big loss and there going to want 5% still. (Yeah I know you need to work harder to sell a property right now but Im still taking 1 hell of a hit and your not)
So in short has anyone bought or sold lately? maybe to upgrade?
Are there still buyers that dont want a foreclosure but a move in ready home with killer finished basement, Bar and patio?
Has anyones Realtor sold for less then 5% in the last 6 months.
Sorry for such a long read but as always guys I appreciate the info.
Justin

 

[VirginIslander]

Is making it a rental property (to worthy renters of course) a possibility? Atleast you could have someone paying/helping on the bank note until home values come back around, but in the mean time you can get a bargain on the current market. Don't know if its in the budget, but an idea none the less.

 

[terrantheman]

That's a good question VI had? My question is the neighborhood you want to move into is the cost more or less? I think in this market the upgrades are great but won't add to the value of your home but might actually help you sell it... If you were to be able to unload your home and move into the neighborhood at an even swap would that satisfy you? I think that might be your best bet in this market pigs get fat hogs get slaughtered. Good Luck!

 

[Jfire]

I not so sure I can rent. Most the rentals around the area are to people that dont give two shits about what there in. In fact there is alot of sect. 8 rentals going around. (If your not sure what that is basically someone gets to live in a 1800 a month house for around 500.00). They pay 500 while the u the taxpayer picks up a 1300 month tab. I have never worn shoes in my house. I could just imagine people tearing the shit out of my house. Also I need some equity to pay for the new house. I have about 30k saved but am going to need more. Even though the houses we want to move to "are on sale" right now. Most have gone from 400K-450K to 325-375K right now. 4 yrs ago I would of been swiming in Morgage payments. Could we have done it yes. But it wasn't fiscaly resposnible for us even though alot of families were "knee deep in the free bank trough" we never did and now are being punished for it.
Justin

 

[pfm721]

As a suggestion before you hire a realtor you could try to sell it yourself. You cold think of your asking price as $270K and your bottom as $257K which is what you would net after commission. My parents sold their house in FL on their own. It was a lot of work but worth it to them. They put an Open House add in the paper and signs from all the nearby intersections that directed people to the house. The signs were creative bright colors, funny shapes and easily readable. Took them about 6 weeks to find a buyer. Just a thought.

 

[Kurtdesign1]

Joliet I feel your pain. I build houses in the region you're in and know the market a bit. To answer your questions, yes there are buyers but generally they're savvy ones. A good friend in Romeoville (near you somewhat) has been trying to sell for nearly 2 years with 2 different agents. He's recently (prior to Christmas) started listing it himself with no luck. The problem is that he's not willing to discount majorly.
Another close friend is in the NW suburbs (South Elgin) and had to settle for a rental where he loses $500 a month, plus utilities.
Times are tough and my best advice to you would be to stick it out. Unless you're fine with a loss (which you're obviously not, judging by your posts) it's hard to sell unless you've got one of 3 things going for you:
1) A crazy architecturally stunning house
2) Are willing to take a huge loss or reduction in selling price
3) Have a green home

Perhaps you could "test" your home to quantify Energy Efficiency performance using blower door & duct blast tests. If necessary, you could do a few appropriate upgrades to "tighten" your house and increase it's insulation. It would be a remodel & thus would cost you a bit but it could set you apart.

In my area (Fox Valley) the numbers go a little something like this: There's a 6-12 month supply of homes around $300k at the current rate of sale (in itself, that's not crazy terrible). There's a 6-12week supply of green homes in that range, plus these homes are not taking a large hit on list.

Hope this helps. If I can do more, feel free to ask.

 

[Phi Delt]

can't hurt to ask the realtor to take a hit as well.

My neighbours just sold their house, and the realtor waived the commission on the first $100K. They saved $7000 that way.

 

[smokinghole]

Not sure how much help I would be for you but I just got an offer on a house accepted. My wife and I had been looking in the $130k-$150k price range and had put offers in on two houses. The deciding factor it seemed for us to get someone accepting the offer was a seller that had wiggle room. The person we're buying from paid less than $110k back in '02 and now it's listing for $145k (lowest in the neighborhood). We negotiated to $146,500 and they pay $6k in closing costs. The price is more than half what you're talking about but just an example of how we came to terms. You'll have to be willing to do something for the buyer in order to sell the house. Split closing costs or drop the price, because other than that what does your house have over the short sale 5 miles away in what I call a "manufactured neighborhood".

Also from my point of view as a buyer some of the home improvements have value but most of the finishing things like flooring and other neat little add on stuff does not attract me much. I know that as long as it's a good home with a lay out I like I can change the floors and everything else in the house over time.

Now it seems you have some wiggle room but don't want to take a loss on the home which I entirely understand. The thing everyone keeps telling me is that in order to even make sense when you sell you should have lived there for at least three years and five is more ideal. It's my opinion (not sure how valuable) that you will have a hard time selling and most likely will have to take a loss if you want to sell right now. I'm being told it's the best buyers market in like 70years. There are most likely foreclosures and shortsales around for comparable houses that which will greatly detract from the appeal of your house to others. If you ask me I would stick to the house for a few more years and sell when the market is healthy again. Your best bet would be to contact a well established realtor that knows the market around there. Who knows maybe there's one at your B&M that could help you out. That's how I ended up with the guy I'm using.

 

[Sigolo VI]

Justin:

I'd be trying to look outside of the traditional market. I'm not familiar with your area, but if you have large corporate employers in your area, they sometimes look to snag homes for higher-level employees who are transferring. Some federal government agencies do the same thing, I'm told.

If there are other homes in your area for sale, I'd get a "For Sale by Owner" sign up pretty quickly. If Joe Real Estate Agent is taking a couple to look at the house down the street, they are going to see your sign as well. Doesn't take a genius to figure out that both sides can save some $$ if an agent is not part of the deal.

I doubt this will help, but explore a "bridge" loan with your bank. Sometimes, they'll give you a deal to buy house B, and only charge you interest on the loan for house A until it sells. Problem is, you have enough principal outstanding on house A that interest only probably isn't much of a break.

 

[Jfire]

Kurt,

Joliet I feel your pain. I build houses in the
region you're in and know the market a bit. To answer your questions, yes there are buyers but generally they're savvy ones. A good friend in Romeoville (near you somewhat) has been trying to sell for nearly 2 years with 2 different agents. He's recently (prior to Christmas) started listing it himself with no luck. The problem is that he's not willing to discount majorly.

Whats his idea of majorly discounting a home mines 50K. I realize you can buy a foreclosure but its not move in ready with every ammenity. I go into peoples homes all the time with my job and cant believe peoples taste from floor to ceilings. Everything is so damn cheap looking I think thats why people have such a hard time to begin with selling homes.

Times are tough and my best advice to you would be to stick it out. Unless you're fine with a loss (which you're obviously not, judging by your posts)[/I]

If I bought for 260k brand new and put 52k in it in for 4 yrs(312K) and want 260k at sale isn't that a loss. 50k in my book is:scratchhe Maybe not enough.
I seen to spec homes that a builder 2 blks away sold in Dec and Jan for 240k both. They are the same square ft and come with no landscaping, no custom 18X28 concrete stamped patio. No Double lot. No 30k Finished basement. No Custom filtration and softner system. No 36 point 2 motion alarm system. Upgraded marble a granite sinks and tops. Etc Etc I would hope I could get the same that a builder got for stripo spec homes a few blocks away?
I guess the only way Ill know is to put it for sale. But I know that waiting for home prices is not a option. I have to get out of this subdivision I cant even enjoy the 1 thing ive spent the most money on in my life. Everyday my wife comes home from a job she hates just to deal w a bunch of ignorant neighbors spread thru out the subdivision.( People that have no business being there.)
Thanks for the current help guys keep the comments coming.
Justin

 

[terrantheman]

I don't know this is not a sellers market it's a buyers market... We have deflated home prices and really what makes yours sell more than the next guy is your upgrades unfortunately you probably won't get your investment out of them. I think you moving to that "nicer" neighborhood my not be the wisest move if it's going to put your family out. Be happy that you have a nice home and just stay put and when you can do it, well then "go for it!" I would never short sell my home because I know what it's worth and it ain't worth what this market is bearing for it, period! In 5+yrs I could sell but thankfully I'm very happy with where I live i.e. good schools, good growing economy etc... Can't go wrong. Good luck Justin but makes some wise moves buddy especially in this economy.

 

[Jfire]

Whatever happens Ill keep you guys updated. But if i wait 5yrs for my home value I'll be stuck in the position I was in before. The homes selling in the "Grass is Greener Subdivision" will be back up to 450K.

 

[smokinghole]

Well it just sounds like you have to do a list of the benefits and downfalls to selling/moving right now. If this loss could set you up for much greater equity in the future where you would be happier then the loss may be worth it. Not that making a list will make it any easier.

Hell I just had to make a decision to put an offer in on this place I'm under contract on, or offer on a short sale. The shortsale was $150k but it was worth closer to $180k. The problem was it was more expensive for us all around and would have been worth it had we had more money to play the offer game. There were already two in on it (no bank negotiator yet) and to even be competitive we would have had to offer full price and pay closing costs. The taxes were higher, there were no appliances, it needed dry wall repair, paint, flooring, HOA were higher, and the utilities might have killed us. After it was all said in done it would have made us more $$$ but we didn't want to stretch ourselves to the point of constant frustration. So we went with the cheaper home that had a geothermal hvac system.

 

[Mitch]

your in a rough spot. Many I know can't even refinance let alone buy bigger due to the credit crunch. I don't know your area, but here in Florida it's a buyers market, prices are half of what they were a couple of years ago and if you have money for a down payment you can just about steal property. I'd start by checking with your bank about a mortgage and get pre approved so you know you can get into where you want to go and what it will take. Then you should be able to figure out what you need to get out of where you are at to make it work.

 

[Jfire]

your in a rough spot. Many I know can't even refinance let alone buy bigger due to the credit crunch. I don't know your area, but here in Florida it's a buyers market, prices are half of what they were a couple of years ago and if you have money for a down payment you can just about steal property. I'd start by checking with your bank about a mortgage and get pre approved so you know you can get into where you want to go and what it will take. Then you should be able to figure out what you need to get out of where you are at to make it work.

Mitch Im just below 800 on fico(today). No card balances, paid off every month. Have 15% in savings for the new house on 320k.( not including making a dollar off this home).make between 80k and 200K(not too much info) Only owe on house and 1 car. No cards what so ever If I charge 5k its paid off or if I dont have it I dont charge it. Both our parents tought us everything about credit. My brother in law who was a broker 2 yrs ago looked at our figures and asked what the hell i was doing in such a small house because we did so well with income. I told him I was being responsible. He was a mortgage broker at the time and said it was 1 of the best reports he had seen. Im just worried 15% wont be enough on the next house, even with a spotless credit report and high income.

 

[Mitch]

all I'm saying is all bets are off these days, I know people with very good credit that got turned own on a refinance. You may even find out you don't need to sell to buy and in that case maybe renting is a better option until the sellers market changes. I just sugest you start with the bank.

 

[Saully]

The problem is that the amount you paid and the amount you put into the house have very little to do with the amount that it's worth in today's market. (We bought our house in the summer of 2005 and the value's down by about 40%.) As said above, the additional stuff you did may help the house sell faster but may not increase its value. This is true for the most part in real estate transactions generally, unless the improvements were to keep up with the rest of the neighborhood or certain specific items such as adding a bathroom or upgrading the kitchen, again depending on the neighborhood.

The basic rule of real estate value is "Location, location, location." That is the primary determinant of value.

Sorry to hear of your situation. It's really disappointing to move into a new place and then wish you hadn't.

 

[Kurtdesign1]

Kurt,
Whats his idea of majorly discounting a home mines 50K. I realize you can buy a foreclosure but its not move in ready with every ammenity. I go into peoples homes all the time with my job and cant believe peoples taste from floor to ceilings. Everything is so damn cheap looking I think thats why people have such a hard time to begin with selling homes.

Well, I don't know specifics but I know he hasn't discounted even 20% what he wanted for it initially (not what he owes).

If I bought for 260k brand new and put 52k in it in for 4 yrs(312K) and want 260k at sale isn't that a loss. 50k in my book is:scratchhe Maybe not enough.
I seen to spec homes that a builder 2 blks away sold in Dec and Jan for 240k both. They are the same square ft and come with no landscaping, no custom 18X28 concrete stamped patio. No Double lot. No 30k Finished basement. No Custom filtration and softner system. No 36 point 2 motion alarm system. Upgraded marble a granite sinks and tops. Etc Etc I would hope I could get the same that a builder got for stripo spec homes a few blocks away?
I guess the only way Ill know is to put it for sale. But I know that waiting for home prices is not a option. I have to get out of this subdivision I cant even enjoy the 1 thing ive spent the most money on in my life. Everyday my wife comes home from a job she hates just to deal w a bunch of ignorant neighbors spread thru out the subdivision.( People that have no business being there.)
Thanks for the current help guys keep the comments coming.
Justin

First of all, I misunderstood your earlier post. Sorry about that.
You are right; the only way you'll know is to put it up. Who knows, maybe one of the losers you live by have a rich friend. It could happen and you'll only know when it DOES happen. What I can tell you I've seen in the housing market is that $$-spent does not equal $$-value in every case. As you say, so many people live in cheaply outfitted homes so perhaps your classy version of the model won't command the money it was worth. Granted, you're saying you'd take no added value for your amenities but what I'm saying is that the baseline might not be $312. Unfortunately you may have to discount from $262... Man I hope it's not the case but it's what I would assume could happen. South suburbs suck right now bud. Look into finding a great real estate agent. That would be your best bet. Remember, it doesn't cost you anything!
Best of luck bro... :cjump:

 

[BradMc]

The problem is that the amount you paid and the amount you put into the house have very little to do with the amount that it's worth in today's market. (We bought our house in the summer of 2005 and the value's down by about 40%.) As said above, the additional stuff you did may help the house sell faster but may not increase its value. This is true for the most part in real estate transactions generally, unless the improvements were to keep up with the rest of the neighborhood or certain specific items such as adding a bathroom or upgrading the kitchen, again depending on the neighborhood.

The basic rule of real estate value is "Location, location, location." That is the primary determinant of value.

Sorry to hear of your situation. It's really disappointing to move into a new place and then wish you hadn't.

All I can say is get a good hard working broker, and I hope the housing market in your area is better that what I just went through trying to sell my place in Northern MN, the market is in the tolet there, How ever here in SC it is great so far, for both Seller and Buyers....(Homes r still moving)
I had about $25,000 in upgrades on a $130,00 home and well need less to say when the Gov. contracted Relocation company got the house in MN, I lost my ass, but I'm out from under it and I just wrote it off as live and learn, and I now have a much newer 4 bedroom home and life is good....
My only regrets in this whole move is I wish I would have done this about 2 years ago.....

Good Luck Bro

 

[Jfire]

Kurt,
I think I know the answer already but Ill ask. I have a 20 yr. experience Coldwell Realtor I used to sell my old home. Do I use her and pay the realestate fees 5%. or list online w a MLS service and "chop" that half of the price immediately of the list price.
AND once again guys I really value all your opinions tremendously more then you know!